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New Report Uncovers the Shocking Student Debt Burden Beauty School Students Take On

Cosmetology students borrow more in federal student loans than most students, rarely graduate on time and struggle to earn enough to pay their loans

ARLINGTON, Va.—A new report out today reveals for the first time the shocking amount of debt beauty school students take on only to end up in jobs that rarely pay off in terms of earnings. The examination of federal data on cosmetology schools nationwide shows that state-mandated education often fails aspiring beauty workers. Specifically, the new Institute for Justice (IJ) study finds:

  • Cosmetology students, who are typically lower-income, on average borrow $7,100 in federal student loans to complete the education required for cosmetology licensure. That debt burden is $600 higher than the average across all students. The average cosmetology program costs more than $16,000 and takes about a year.
  • On average, fewer than one-third of students graduate on time. And in any given year, between 15% and 31% of cosmetology schools saw none of their students graduate on time.
  • Those who graduate and get licensed can expect to earn just $26,000 a year on average, less than restaurant cooks, janitors or concierges, none of whom must invest—by law—in costly education to work. With those wages, many may find it difficult to repay their student debt.

Tellingly, “Beauty School Debt and Drop-Outs: How Cosmetology Licensing Fails Aspiring Beauty Workers” shows that most cosmetology programs exactly match state licensing mandates. When states reduce licensing hours, schools quickly fall in line by reducing the hours needed to graduate. The study demonstrates that state cosmetology licensing doesn’t help students or the public—only cosmetology schools.

“Cosmetology students take on student debt hoping that their education will lead to greater economic opportunity, but our report reveals that beauty school is often a raw deal,” said IJ Senior Research Analyst Michael Bednarczuk, Ph.D., one of the study’s co-authors. “State licensing requirements funnel students into private, for-profit schools that receive billions of dollars in federal grants and student loans. Yet these schools often fail students and leave them with debt they cannot afford to repay. There are better ways than licensing to protect the public and state lawmakers should consider alternatives.”

Forcing aspiring beauty workers into costly and lengthy schooling might make sense if it were essential for public safety, but there are good reasons to think it is not. According to a recent legal analysis, only about 25% of the material states require schools to teach directly addresses health and safety. In fact, cosmetology faces steeper licensing requirements than fields more directly linked to health and safety. For example, on average, cosmetologists must complete 11 times as much training as entry-level emergency medical technicians.

One reform lawmakers should consider is exempting obviously safe niche beauty services—things people can safely do to themselves with little or no training—from cosmetology licensure. In recent years, some states have dropped licensing requirements for shampooing, blow drying and styling, makeup artistry, eyebrow threading, eyelash extensions, and natural hair braiding. Another reform is refocusing regulation on what is important: ensuring safe, sanitary practices at salons through inspections. For instance, restaurant workers are not required to complete burdensome state-mandated education to do their jobs. Instead, frequent inspections ensure that restaurants are clean and that workers are properly informed about health and safety hazards.

Despite increasing political polarization, decreasing occupational licensing burdens has been a bipartisan effort in recent years. Both the Obama and Trump administrations encouraged states to reduce licensing barriers. Just recently, President Biden called on the Federal Trade Commission to promote competition in the American economy, noting that “some overly restrictive occupational licensing requirements can impede workers’ ability to find jobs and to move between States.”

According to a 2020 nationwide poll conducted by Public Opinion Strategies, a majority of Americans—Republicans, Democrats and Independents—support efforts to reform occupational licensing. In addition, respondents ranked government-issued licenses as the least important factor in choosing a service provider. And when asked which criteria make a person qualified in an occupation, respondents put having a license last.

The Institute for Justice’s strategic research program produces social science and policy research to inform public policy debates on issues central to IJ’s mission. Past IJ strategic research reports on occupational licensing include a nationwide study of the burdens of licensing and a study on the costs of licensing in the states and nationwide. Another recent IJ report studied licensing barriers for ex-offenders.

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